/biz/ - Business & Finance

>>245398
they just fuck over stupid people and buy gold extremely cheaply. the only reason they do so well is because people are so dumb

>>245398

I always thought the whole idea of buying gold/precious metals so that, in the future, you can sell them off at the inflated price - like a physical version of your savings which actually increases with inflation, rather than constantly being behind it.

http://www.southparkstudios.com/clips/410876/the-jewelry-polka

This explains it.

>>245398
Those stores obviously pay way below spot.
What I would like to know is, who are they selling to?

>>245488

1. Idiot sells scrap gold to "we buy gold" guy very below spot.
2. "We buy gold" guy sells to refiner (below spot, above what idiot got).
3. Refiner refines the scrap into industrial / investment grade.
4. Refiner sells gold to industrial consumer or gold dealer (wholesale prices)
5. Industrial consumer / gold dealer sells to consumer at a markup.

>>245669
6. The son of the consumer who bought a coin and inherited it after hir parent died goes back to step 1.
THE RIDE NEVER ENDS

>>245488
They just have standing commitments with refineries. It's not that hard to figure it out.

Oh and OP?
I too buy gold (and silver)
Call me.

>>245404
This. You see those "We buy gold" stores all around? They only popped up in the last 10 years when gold started rising due to inflation. They buy gold from dumb niggers and white trash that have no idea what gold is worth or even what an ounce is. Almost every check cashing scam joint buys gold now. Every unscrupulous pawnshop advertises it. All the places where niggers and white trash to go make a quick booze dollar.

They then turn around and make a 1000% return by selling their it to their Chinese overlords.

>>245488
like people said, usually gold refineries

however they DO look over what they receive, and sometimes if it looks like a valuable piece of jewelry or a numismatic item, they might go to a jeweler or coin shop instead

>>245398
Same way ANY operation makes money. Buy low, sell high.
They buy gold below scrap value, melt the lot down, and sell it in bulk.

Alright guys gonna derail this thread just a tad bit...
I have no physical aassets right now and my net value is probably like 0$.
I want to buy either gold or silver, which one would you guys recommend?
Where should I buy from?
Where should I store it?

Thanks dudes

>>248073
>which would you recommend

Between the two I would say silver, but the question arises: how are you going to buy it if your net value is $0?

Anyway, PMs should not be a primary investment. Make some money, do some proper investing, and THEN you can think about adding PMs to your portfolio. They act more as a hedge than anything.

>>248083
>how are you going to buy it if your net value is $0?
I plan on working first, investing in silver isnt the first thing i plan on doing but its something I would like to do eventually once I find work. I'm graduating high school soon and going to Uni so I plan on doing whatever I can at Uni to earn some extra cash.

Sorry, what is a PM?

And thank you for your advice man!!

>>248073
I recommend you setting up a contribution plan where you automatically buy shares in a quality growth mutual fund.

>>248097

PM = precious metals (gold, silver, platinum, palladium)

>>248100
I thought a contribution plan was pretty much just a retirement plan? And this sounds too good to be true, why wouldnt everyone else be doing it as well?

>>248102
Oh right thanks.
Man, a week ago some well off stock broker came to my school and did this assembly, he told us about how worthwhile 'investing' was. He gave us the typical salesmen spiel about how easy it would be, "just invest and you'll earn steady income over the years" "save money at banks with high interest rate and you'll be getting 'X' amount' per year."
Total hocus pocus, i mean, never trust a man that makes something hard seem easy but all the sheep in my year really seemed to think investing and the stock exchange was easy shit.

>>248113
>why wouldn't everyone else be doing it as well
Pretty much everyone DOES do it or something similar. You can automatically invest in stocks / bonds / mutual funds / whatever outside of a retirement plan.

Risk vs reward is an important concept to learn. Getting a moderate return isn't terribly difficult to do.

>>248113
>I thought a contribution plan was pretty much just a retirement plan?
No its a regular mutual fund account. They waive your minimum balance requirement if you setup automatic contributions much like banks do if you setup direct deposit.

Now you don't really want to stop the contribution until you reach $3k which is the usual minimum buy in for mutual funds. But you can do as little as $20/mo.

>>245398
Buy stolen jewelry from thieving junkies - they accept the lowered price as the cost of being able to get rid of precious metals without needing to know a fence.
Take purchased gold, melt it down, sell it somewhere else at sane price.

>>248154
>sane price

Guess it depends on how you define sane price, but good luck getting anywhere near spot with sketchy home-melted gold.

>>245409
This pretty much answers the whole thread why are you guys still talking

>>245398
>Do they just have a ton of money to buy things at a certain price margin, and then sell it at market somewhere else?

That is exactly what happens. If you are smart you go to sell your gold knowing what the spot price is so you know if you're selling to an honest dealer.

There are plenty of honest gold buyers who pay close to bid price and make their profits on high volume at consistent low margins over a great deal of time, you just have to be smart enough to know one when you see one.

>>245408
That would be the base idea, but like anything else the price changes with supply and demand. If more people try to rush to gold because they are worried about inflation, then this will drive the gold price up, and therefore the return will change with demand and not match inflation perfectly.

>>248165
Sane by comparison. And I wasn't saying home-melted. The junkies bring in the jewelry as is, take their cash and leave. The stores sell the jewelry to be melted down.

And no, it's probably nowhere near what you or I would pay for quality gold but that's sort of the point: take stolen goods, convert them into a relatively untraceable form, and make a buck off of the fact that your suppliers aren't very aware of the value of their product (regular people) or don't care because that's an acceptable loss to them because they need the money now (junkies/people in debt.)

I'm just going off of what a friend of mine who used to be a junkie before he cleaned himself up has told me before: he robbed houses to get dope money and since he lived in the middle of nowhere it was take the loss or he could try to sell the jewelry to people he knew but that took time, whereas the cash for gold places were consistent and convenient.

I've always been surprised how many gold stores I see. How many customers do they get a day?

>>248204
Do they really not have anything in place to check ownership? That's ridiculously open to abuse.

>>248236
>that's ridiculously open to abuse

Welcome to reality. This kind of thing happens a lot with pawn shops and such.

Some reporters did a little test to see what kind of prices these stores were offering.
They had a gold ring and every store valued it around 28-35€ or so.
They went to a pawn shop and got a price of 280€ for that ring.

That's fucking absurd. These stores are screwing people over so damn hard it's not even funny.

>>245398
They're a bunch jews basically.

So what do all these cash4gold type places do with precious stones?

Also where do people sell their high end jewelry? I mean a quality diamond ring could easily be worth 2+ mill. How do fuck do you sell that kind of stuff?

>>250003

Resell to jewelers I suppose.